By Matthew Costello, CEO at Voyager Portal
This series of posts focus on the key basic metrics that the maritime C Suite, Finance and Business Leaders should be tracking. They act as a representation of the health of your operation, and how efficient is your team.
As a Business Leader, VP, or C-suite, tracking and measuring relevant KPIs is a critical first step to understand how your company is performing, specially in demurrage where the interpretation of a certain contract or clause can lead to big financial losses.
In this post we’ll be covering Total Claim Processing Time:
Demurrage claims can take months and years to settle due to the complex process of collecting documents, calculating the claim, negotiating the claim and agreeing on settlement. It is not unusual for claims to go outstanding for 6 to 18 months.
Many claims are written off or settled through commercial means by making adjustments to freight or sales terms in future deals. Therefore, the actual performance of claims collection can be impossible to track accurately for finance teams.
Steps to improve this metric:
- Start processing claims from the first load port rather than waiting for discharge
- Leverage AI and automation to capture key documents and extract claim data more efficiently
- Leverage data to identify counterparties that are slow to pay
- Clear escalation and reminder policy for outstanding claims
- Track if any claims have been settled commercially through adjustments in freight or a trade
What is a good benchmark:
- Completion of operations to claim calculated: 72hrs
- Claim calculated to claim submitted: 24 hours
- Claim negotiated to final agreement: 14 days
- Final agreement to settlement: Within 30 days of invoice
